Friday, March 21, 2014

Budgeting

Why didn't they offer a course in college on "Budgeting In the Real World/Investing"? Or even "Managing Your 401k"? Or did they and I didn't know about it?? Looking back, I don't think my college self would have actually taken this class (unless required), but hindsight is 20/20. When Mike and I got our first jobs and were handed our 401k packages; they could have been written in Chinese for all we knew. We were SO lost.Since then, budgeting, investing, and managing our 401ks have become a hobby of ours. We are by no means accountants, but we manage.

Dave Ramsey, Mike's step-dad, and Quicken (thanks Mom!) have been great guides on how to build up our savings account and help with budgeting ideas. Mike and I go off of a zero-based budget. We have a certain $ amount for our checking that we will never go under. We act like that number = $0. For example, treat $3,000 like it is $0. The night before we get paid, I look at our bank account and transfer any money "left over" to get us to "$0". I get paid every 15th of the month, so I base it off of that, but you can base it off whatever day suits you best.

When Mike and I got married, we knew we were going to have a large school loan payment and other bills to follow. Our goal from the beginning was to pay the loan off as quick as possible. The way the loan was laid out was very interesting, and actually made it easier to pay off. The big $ amount was divided into 6 smaller loans each at a different interest rate. The way we decided to tackle that was by taking out the highest interest ones first and going from there. We see each "little" loan as a goal. Lately, we have been really strict, only because we have the loan down to two payments left. We are ready to get rid of these! Because this is only temporary, we are transferring my whole paycheck to savings to help build it up quicker. It is challenging, but it will be over soon:)But just because you are on a budget, it doesn't mean you can't go out and have fun. We look at it like every dollar amount we earn goes towards something. Whether that be loans, groceries, or FUN, our money has a a place to go. Like this month for example, we are booking a trip for our one year anniversary. We know where that money is going and we have planned for it.Set goals for when and what you want to pay off and it will be so much easier. Mike and I have turned it into a game. We try to reach a certain amount by a certain time and if we do we treat ourselves.The purpose of this post is to help others out there who are in the same place. Debt and bills are a drag, but planning goals and saving for them is such a good feeling! I know there are limits as to how much you can save at a time, but even transferring payments of $20-$50 to savings a month starts to add up!